Holden, parts makers see rocky road ahead

Australian car and spare parts makers are at the start of a
massive transition and some, perhaps all, could fall by the
wayside, says industry veteran Ivan Deveson.

The dire warning came as the local arm of the General Motors
empire, GM Holden, was itself grappling with over-production and
slumping demand, just like its parent in the US.

Mr Deveson said the Federal Government and the governments of
Victoria and South Australia needed to co-operate as never before
to help the industry get through the current crisis.

More and more parts were being sourced offshore as new models
were introduced into Australia and the resultant closures were
threatening the fabric of the industry, Mr Deveson said at the
launch of the Automotive Centre of Excellence at Melbourne's
Docklands.

"There is a high sense of urgency," Mr Deveson said of the
decline in local parts production. "This is not a time for
political point scoring. This is a time for collaboration like we
have never seen before."

He said the fate of the industry was mostly in the hands of the
car makers but government could play a role.

"The governments can work together to ensure there is an
industry plan that recognises that this industry is important, not
only in terms of the $6 billion of exports it generates and the
50,000 people it employs directly.

"It is a technological base for Australia and it is going to go
through a massive transformation in the next five to 10 years."

Mr Deveson conceded there was a danger the industry might not
emerge out the other side.

GMH has already foreshadowed the closure of its third shift at
its Elizabeth assembly plant in South Australia, with the loss of
1400 jobs, proportionately more than the 17 per cent cut in
employment planned in the US.

The company has huge stocks of unsold Commodores, which have
been rolling off the line at the rate of 800 a day while sales and
exports in October were running at about 500 a day.

Production will be scaled down as the third shift is phased out
from next Monday. Output will be cut from 800 to 620 a day.